You're in a pickle. The home you raised your children in, the place you came home from work to for 30 years, and the yard you manicured, is now too much. You no longer have the desire to weed the flower bed, lug the vacuum upstairs, and listen to your neighbor's son's car stereo booming at night. Heck, you don't even know your neighbors anymore, but the memories of this place stretch your entire adult life. Your kids took their first steps in the living room. You took their high school graduation pictures in the front yard. Your grand kids love playing in the oak-shaded back yard.
Making the decision to move into something more manageable is not easy at first. Once you see the necessity and start to think about the possibilities of a new life, a change, you'll feel like a weight has been lifted. And you'll feel freer than ever. We'll try to make selecting an independent living community as easy as possible – arm you with questions, answers and everything in between – We know it's a big decision.
What is an Independent Living Community?
Simply put, it's a community for active, healthy seniors who are able to live on their own. You can live in a home, townhouse, condo, and even a mobile home or motor home. You can own or rent or live as part of a cooperative. Think of it like living in your old neighborhood except these communities have age restrictions—usually over 55—and many offer amenities like clubhouses, gyms, yard maintenance, housekeeping and security.
Independent living communities appeal to residents for providing “seniors only” social environments with many conveniences.
Benefits of senior independent living might include:
Beauty salon & barber shop
Private rental hall
Restaurant-style dining hall
Fitness center & swimming pool
How independent is the lifestyle? Most residents live alone (or as couples) without need for skilled nursing or personal care support. If health declines they might hire private caregivers or invest into a medical alert system to avoid the need for relocation. Other options for “aging in place” within independent senior communities are continuing care retirement communities and senior cohousing as explained below.
The US has about 250,000 housing units in communities for senior independent living. The following overview can help you understand different setups, costs and payment solutions.
Is Independent Living Right for Me?
You can't read the future, but you're healthy right now. You'd like to be around your peers. You value security. You like your independence but don't want to bother with some tasks like yard work and housekeeping. This is a start. Let's look at some other things to consider when selecting an independent living community.
“Home sweet home” takes many forms in active adult communities. Apartments, condos, cottages, mobile homes and town homes are among the many housing styles. Management is a variable too: Policies may be set by private companies, nonprofit organizations, government agencies or the residents themselves. Here we describe the main types of independent living communities and explore their costs. Costs are in line with the market prices of similar housing in that region. And there can be shared costs like common utilities, taxes and community services. These can run $1,000 to $2,000 per monthly. Other services like housekeeping are usually additional. For low income seniors can find subsidized programs through the U.S. Department of Housing and Urban Development.
Here are some costs to consider when researching independent living communities. Ask if they're included:
Senior apartments on the private market are the most common type of independent senior housing. Most have strict age minimums of 55 or 62 years. Unlike some federally funded senior apartments, private senior apartments aren't required to also accept younger tenants.
Besides providing child-free environments, senior apartments offer these main benefits:
Just like mainstream apartment complexes, senior apartment communities can be humble or high-end. Some provide only the benefits listed above. Others have computer labs, fitness centers, gardens, libraries, salons and other amenities.
Generally $1,500 to $3,500 is considered reasonable monthly rent for a one-bedroom apartment. Given the varied amenities and regional price differences though, senior apartments cost anywhere from under $1,000 to more than $10,000 per month.
Low-income seniors may receive Section 8 rent subsidies. Section 8 housing vouchers are accepted by select senior apartment communities. The current voucher maximum is $2,000 per month.
Age-restricted communities let seniors buy or rent housing on properties with shared amenities and services such as golf courses, swimming pools and transportation. Each residence is typically connected to the others by sidewalks or other paths.
Types of homes in age-restricted communities include:
Residents of age-restricted communities have many opportunities to socialize informally and through planned activities. Generally a clubhouse serves as the community center with areas for restaurant-style dining and recreational activities. A professional activities director creates a main calendar of events, plus residents form clubs around countless interests: playing bocce ball, singing in a choir, speaking Spanish, investing in startups, volunteering, quilting and so forth.
Home purchase prices in age-restricted communities vary with local housing markets. Generally these units are relatively small, so they're cheaper than typical “starter homes” for younger couples nearby. In Florida or Arizona, for example, you can easily find an attractive age-restricted condo priced under $150K. Opting for a refurbished mobile home instead, you can spend far less.
In addition to paying for the home, buyers pay homeowners association fees to help maintain the property and meet community expenses.
As for renting, rates range from low budget to very exclusive. Comparing senior retirement rentals managed by Brookdale (America's largest provider of retirement rentals) we see that typical prices range from $2,300 to $3,500 per month… but as for extremes, the cheapest Brookdale units cost about $1,000/month and the deluxe properties rent for up to $10K.
Continuing Care Retirement Communities
Continuing care retirement communities let residents access different levels of caregiving as their needs change. These properties offer three types of home environments:
Independent senior living
The benefit of choosing continuing care is aging in place. In other words, a senior who loses some independence won't need to leave their community. Caregivers are already on the property — plus the payments for assisted living or skilled nursing are already covered.
Payment for continuing care services is made up-front. Before moving into the retirement community, each resident pays a hefty entrance fee. The sum is enough to cover special care when/if it's needed until the end of life. Some residents pay hundreds of thousands of dollars. Often the funds aren't tapped — so when a resident passes away, a high percentage of their entrance fee is disbursed to heirs.
In addition to paying an entrance fee, the resident makes housing payments and pays a homeowners association fee. These costs are akin to living in a standard age-restricted community as described above.
The total expense is high, but some continuing care retirement communities are affiliated with nonprofit groups that lower the cost to seniors with financial need. Special prices for continuing care might be called “benevolence rates.”
Senior cohousing is the newest kind of independent senior community. A cohousing community consists of traditional private households that together manage common property, socialize, and address community needs. When a cohousing community is specifically for seniors, the homes and walkways have been outfitted to let people “age in place.” That is, the homeowners won't need to move to assisted living or or nursing homes when/if their independence falters.
Examples of property and services under cohousing management include:
Often an additional home is shared by the group. The common house might be used for cooking, dining, laundry, recreation and hosting out-of-town guests.
Senior cohousing is sometimes chosen by longtime friends, but people also find cohousing through companies and organizations that retrofit homes especially for senior cohousing.
Legal structures governing senior cohousing arrangements vary. Common structures are homeowner associations, condo associations and housing cooperatives.
As for cost, choosing cohousing can be a money-saving move. Although property prices might be standard for the region, day-to-day living is cheaper because resources are pooled. For example, groceries cost less when bought in bulk. Communal living brings opportunities to cut energy costs too, whether by sharing resources or making a more dramatic move. As reported in the magazine Communities, residents in a multigenerational California cohousing community are receiving money from their local electric company after pooling resources to invest in solar panels.
Subsidized Housing for Independent Seniors
Federally subsidized senior apartments serve people who are officially “low income” and “very low income.” Eligible residents pay no more than 30 percent of their monthly incomes for rent.
The government subsidizes rent payments through the Section 202 program Supportive Housing for the Elderly.
Subsidized senior apartments are owned and operated by nonprofit groups. These groups coordinate with the USDA's Rural Housing Service and the Department of Housing and Urban Development (HUD). Some of the properties look outdated and drab, but others look modern and inviting after recent renovations.
Unfortunately the HUD and USDA senior apartments cannot serve all eligible applicants. In some parts of the country, seniors wait more than 12 months before a unit becomes available.
As alternatives the following federal housing programs also ensure that tenants don't spend more than 30 percent of income on rent. However, these options aren't specific for seniors.
Seniors and people of all ages may live in public housing units, which are rentals on federally-owned properties. You can find public housing for a region through its Public Housing Authority (PHA). For PHA contact information call 800-955-2232.
For help renting on the private market, individuals can receive Section 8 vouchers. Property managers may choose whether or not to accept tenants who use Section 8 funds.
Another rental assistance program for all ages is The HOME Investment Partnership Program. It's managed through local HUD offices. Click the link to find an office or call 800-955-2232.
How to Pay for Senior Independent Living
Personal income is the most common payment source for independent senior living. For low income seniors, extra funds might be available through the rent subsidy programs mentioned above. Active adult communities generally cannot accept payment sources that commonly fund nursing home care and assisted living (e.g., Medicare, Medicaid and long-term care insurance).
To pay for retirement housing, individuals and their families commonly make these moves:
Use Social Security and pension payments
Withdraw from savings or collect annuity payments
Cash out investment retirement accounts
Get a loan or line of credit
Consulting with a trusted financial planner is highly advisable as you plan for retirement. Here are a few notes about annuities and loans you might discuss.
An annuity is a financial arrangement between an individual and an insurance company. A well-designed retirement annuity ensures that the person receives a steady stream of income during retirement. The steady payments are funded by the person's savings; the buyer pays a lump sum upfront.
Ideally a retirement annuity is purchased years before it's needed. This brings the most value per dollar because the account can accumulate interest. Still, some annuities can start paying within 30 days. A financial planner can help you understand whether buying a “deferred annuity” or “immediate annuity” would be a wise move.
Benefits of retirement annuities are the security of guaranteed income, the shielding of funds from Medicaid/Medicare consideration, and optional cost-of-living protection.
Home Equity Loan or Home Equity Line of Credit (HELOC)
A home equity loan or home equity line of credit lets you borrow against value built up in your home. The money may be used for anything, including buying a home in a retirement community.
The loan is a lump sum to be paid back over a set period of time. The line of credit works something like a credit card account; you can use the funds, replace them, and access them again.
When the terms are right, these home equity options might be more cost-effective than liquidating investments. However, the risk of nonpayment is more serious than a ding on your credit report. If you default on home equity payments, you risk losing the home to the bank.
A bridge loan is a short-term loan. It's meant to cover expenses until expected income is received. Generally the expected source of income is a pension or a home sale.
A common scenario for getting a bridge loan is having a pending home sale and wanting funds now for the next residence. Bridge loans can be risky though. If you aren't rushed to relocate, they probably aren't a good match for your needs. A financial pro can help you understand risks and benefits for your unique situation.
Questions to Ask When Choosing a Retirement Community
The following questions can help you make an informed decision when choosing a retirement community.
How old are the residents? When asking this question, take care to get an accurate age breakdown of the population. Not long ago most residents of retirement communities were peers. Today their age diversity can be more dramatic, making some communities multigenerational. Two factors explain the phenomenon:
A higher percentage of Americans are able to live independently into their eighties and beyond.
Some retirement communities have lowered their minimum age requirement to 50. Previously the minimum age was at least 55 across the industry.
Also be aware that some communities aren't actually “adults only.” They are “adults mostly.”
What are the policies about children? Senior communities have different policies regarding children living with seniors. They also have different policies for young visitors.
Private age-restricted communities generally do not allow children to stay as residents. If you have guardianship over a child it's certainly possible to find accommodations, but your choices will be seriously limited.
As for children as guests, some private communities have strict “No Children” policies. Others set a minimum age, aiming to control noise. Some are more lenient with age but cap the number of consecutive nights a child can stay on the premises.
Age-restricted communities tend to frown upon children using communal amenities (e.g., the pool, bocce ball court and fitness room) without being accompanied by a senior.
Senior cohousing residents set their own rules. Some senior cohousing communities are staunchly seniors-only. Others would welcome a senior who has temporary or permanent custody of a child.
Federally subsidized communities for people 55 and up may accept seniors with children. Also, up to 20 percent of the apartment units may be occupied entirely by people under 55.
In subsidized communities for people 62 and up, generally no children are allowed as residents.
Cats are welcome in most independent living communities. Communities have different policies about whether cats are free to roam outdoors. Sometimes small dogs are allowed. Occasionally bigger dogs are permitted as well. Senior apartments and other rentals often prohibit fish aquariums because of the potential for water damage.
What are residents' interests and activities? Sense of community is greatest when people have shared interests. For this reason some retirement communities are explicitly interest-based. They could be formed around golf, art or environmentalism, for example.
Read the activity calendar when considering an active adult community. If activities look appealing, then confirm that they're well-attended. On paper or online it's easy to make a dull community look vibrant.
What meals are provided? Service from a high quality chef is a great perk of many retirement communities. If you have diet restrictions, take care to find a community that can meet your needs without hassle.
Also confirm the meal schedule. Unlike nursing homes and assisted living centers, communities for more active adults won't necessarily provide three meals/day. One or two is the norm.
What transportation is available? Most retirement communities provide transportation. Although transportation might not be a concern today, down the line you might want more assistance running errands.
Some senior communities have shuttles with regular schedules and preset destinations (e.g., the beach). Others provide private car services on demand. Generally the private car service is limited to travel within a certain radius of the property.
What is covered by annual & monthly fees? What other charges might apply? New residents in senior communities are sometimes surprised by extra charges. For example, use of the fitness room might be included in your flat monthly fee, but attending exercise classes would cost extra.
To what extent do residents engage with the wider community? Senior communities differ in terms of their involvement with the local town or city. Some are visited regularly by schoolchildren, for example. Some have regular group outings to museums, parks, universities and other attractions.
When comparing prices for retirement communities, remember that sometimes prices are low because the property is on the outskirts of town. You might prefer to be closer to the population center.
What security and emergency measures are in place? Retirement communities generally have some form of security against intruders. Some security setups are very effective at preventing crime. Others make it rather easy for trespassers to do harm… so when you tour the property, be on the lookout for vulnerabilities. You could even check with the local police station for reports of crimes or disturbances at the address.
Security should be provided 24/7. Find out who provides the security and when the guards are on duty. Confirm that security will be in place during all days, nights, weekends and holidays. Also ask about emergency services in case police, fire or paramedics are needed. How many minutes away is an ambulance?
Do residents age in place? Plan ahead! As detailed above, two types of senior independent living communities are specially designed to let residents become older without need to relocate: continuing care and senior cohousing. In other types of independent living communities, aging in place isn't necessarily supported.